Payback Period and Net Present Value
XYZ Software, Inc., has the following mutually exclusive projects.
Year
Project A
Project B
0
$
-9,960
-10,400
1
6,800
5,800
2
4,100
2,900
3
2,700
6,900
Requirement 1:
(a) What is the payback period for Project A?
Payback period years
(b) What is the payback period for Project B? (Round your answer to 3 decimal places. (e.g., 32.16))
Requirement 2:
(a) What is the NPV for Project A assuming a discount rate of 14 percent? (Negative amount should be indicated by a minus sign. Do not include the dollar sign ($).
Net present value $
(b) What is the NPV for Project B assuming a discount rate of 14 percent? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.